EMERGY & ENERGY SYSTEMS

1. EMERGY & ENERGY SYSTEMS Session 5 Short Course for ECO Interns, EPA and Partners

2. Emergy and Economics • Emergy to dollar ratios and Emdollars • Cross boundary exchange • Evaluating loans/interest, operating • Evaluating assets, capital

3. Emdollars Calculation for US: (8 + 32 + 23 + 15) E23 sej/yr = 1.44 E12 sej/$ 5.4 E12 $/yr USA Macroeconomic Overview Fuels Goods & Services Imports 23 Fuel 15 G&S Assets Non- Renewable $ GNP 5.4E12 $/yr Renewable $ 8 Environmental Production 32 Exports Economic Production 1992

4. Emergy to dollar ratios E12 sej/$ • Other countries • From 1980-87 • Currency converted to US $ • Switzerland 0.7 • Japan 1.5 • World 2.0 • Brazil 8.4 • Liberia 34.5 Countries living more on local resources than purchased goods have higher emergy to dollar ratios.

5. Emergy to dollar ratio • Update old economic data • Use the right year • Changes everything to sej, timeless Fuels Goods & Services Imports Assets Non- Renewable $ GNP Renewable $ Environmental Production Exports Economic Production

6. Calculating Benefits/Deficits Price Money from purchaser Environmental Product sold Emergy of product = (flow)(unit emergy) = benefit ratio Emergy of money paid (price)(emergy/currency) to purchaser

7. Calculating Benefits/Deficits • Different emergy consumption leads to trading disparity $1 8.4E12 sej Brazil 8.4E12 sej/$ Japan 1.5E12 sej/$ $1 1.5E12 sej 5.6:1 Japan wins

8. Calculating Benefits/Deficits • Different emergy consumption leads to trading disparity $5.60 8.4E12 sej Brazil 8.4E12 sej/$ Japan 1.5E12 sej/$ $1.01 8.4E12 sej Equitable trades

9. Loans and Interest Interest and Principle One way to represent Imports $ Non- Renewable Assets Debt $ Renewable Environmental Production Exports External market Goods & Services Investments

10. Goods and Services, Operating Expenses Fuel Fertilizer River Rain • Adding to diagrams • Show interaction with purchased goods • As data in evaluations • Multiply by emergy to dollar ratio for year of study Services Soil Sun Wind Harvest Forest Market

11. Assets and Capital • Adding to diagrams Fuel Fertilizer Goods • Calculating contributions • Buildings,Equipment • Divide total value by expected life or use • Materials used preferred • Sometimes $$ is best you can do River Rain Services, Operating costs Soil Sun Wind Assets Lumber Market Forest

12. Practice Exercises What is the ratio of EMERGY benefit to expenditure in buying oil at $17.50/barrel if oil has 7E9 J/barrel, a transformity of 5 E4 sej/J and the emergy to dollar ratio that year is 2 E12 sej/$? A farmer in Mexico sells 1000 lb of tomatoes to an Arizona grocer and receives $500. Another Mexican farmer exchanges 1000 lb of tomatoes for 500 lb of soybeans. If tomatoes have an emergy per mass ratio of 2 E9 sej/g wet weight, soybeans have an emergy per mass ratio of 7 E9 sej/g wet weight, and the US emergy to dollar ratio is 1 E12 sej/$, which farmer got the better deal? What would the trade have to be in both cases for the exchange to be completely equitable?

13. Practice Exercises 44 0.58 27 17 0.3 Debt From the diagram above, calculate the emergy to dollar ratio for the US in 1994 and answer these questions. • What was the environmental contribution to the emergy that year? • What was the annual emergy production that did not go into assets because of the $$s in interest going abroad on US debt? Assets Overseas $ Soil Fuels $ 35 GNP 6.7E12 $/yr 0.42 Envr. 0.46 62 8 Production E12 $/yr Other countries E23 sej/year

14. AnswersRemember, I make mistakes, too….check mine to make sure its right if you don’t get the same thing What is the ratio of EMERGY benefit to expenditure in buying oil at $17.50/barrel if oil has 7E9 J/barrel, a transformity of 5 E4 sej/J and the emergy to dollar ratio that year is 2 E12 sej/$? Emergy in: 7E9 J/bbl x 5E4 sej/J = 35 E13 sej/bbl Expenditure out: $17.50/bbl x 2E12 sej/$ = 35E12 sej/bbl Ratio: 35E13sej/35E12sej = 10 What does this mean?

15. Answers A farmer in Mexico sells 1000 lb of tomatoes to an Arizona grocer and receives $500. Another Mexican farmer exchanges 1000 lb of tomatoes for 500 lb of soybeans. If tomatoes have an emergy per mass ratio of 2 E9 sej/g wet weight, soybeans have an emergy per mass ratio of 7 E9 sej/g wet weight, and the US emergy to dollar ratio is 1 E12 sej/$, which farmer got the better deal? What would the trade have to be in both cases for the exchange to be completely equitable? Tomato emergy: 1000 lb x 454 g/lb x 2E9 sej/lb = 9.08 E14 sej $$ emergy : 500$ x 1E12 sej/$ = 5 E14 sej Soybean emergy: 500 lb x 454 g/lb x 7E9 sej/g = 1.59E15sej The Arizona grocer and the soybean farmer are getting more in trade than they are giving. Equitability: 1000 lb tomatoes = $908 US = 2/7 x 1000 lb soybeans (285.7 lb)

16. Answers From the diagram above, calculate the emergy to dollar ratio for the US in 1994 and answer these questions. 44 + 35 + 8 E23 sej/yr = 1.33 E12 sej/$ 6.7 E12 $/yr • What was the environmental contribution to the emergy that year? • 8 + 35 = 43 E23 sej • What was the annual emergy production that did not go into assets because of the $$s in interest going abroad on US debt? • 0.3 E12 $/yr x 1.33 E12 sej/$ = 3.99 E23 sej